U.S. employers stepped up their hiring in May, adding a robust 339,000 jobs, well above expectations and evidence of strength in an economy that the Federal Reserve is desperately trying to cool.
The May jobs report adds to other recent evidence that the economy is still managing to chug ahead despite long-standing predictions that a recession was near. Consumers ramped up their spending in April, even after adjusting for inflation, and sales of new homes rose despite higher mortgage rates.
Some cracks in the economy's foundations, though, have begun to emerge. Home sales have tumbled. A measure of factory activity indicated that it has contracted for seven straight months. And consumers are showing signs of straining to keep up with higher prices. The proportion of Americans who are struggling to stay current on their credit card and auto loan debt rose in the first three months of this year, according to the Federal Reserve Bank of New York.Fed officials are expected to forgo a rate increase at their June 13-14 meeting to allow time to assess how their previous rate hikes have affected the inflation pressures underlying the economy.
The U.S. economy as a whole has been gradually weakening. It grew at a lackluster 1.3 per cent annual rate from January through March, after 2.6 per cent annual growth from October through December and 3.2 per cent from July through September. The Federal Reserve's so-called Beige Book, a collection of anecdotal reports mostly from businesses across the country, reported this week that the pace of hiring gains in April and May had "cooled some" compared with previous reports. Many companies reported that they were fully staffed.
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